Fraudsters should be expeditiously punished!
Remove politician, officials & business nexus!
Recently FICCI speak out for PSU Bank Fraud & said, FICCI supports speedy action against unethical and illegal Business Practices. On the other hand Assocham insisted upon to cut Govt stake in banks below 50%. They wishes to vanish politician, officials business nexus!
The Federation of Indian Chambers of Commerce and Industry (FICCI) unequivocally condemns the illegal and unethical business practices adopted in the recent PSU Bank fraud case and commends the speed with which the Government agencies including Enforcement Directorate, Central Bureau of Investigation and other agencies have moved to take the investigation forward.
According to Rashesh Shah, President, FICCI, “Fraudsters should be expeditiously punished in accordance with the law and FICCI supports the need for swift and strict action against those companies who have allegedly defrauded the banks.”
FICCI also recommends that in order to strengthen systemic and others risk management systems within the banking ecosystem, a thorough root cause analysis be done to plug the gaps and ensure there is no repeat of any wrongdoing that impacts the rightful functioning of any banking institution while discharging its duties to its customers and stakeholders.
FICCI defends the freedom of business enterprise but does not support illegal and unethical business practices. The Punjab National Bank's fraudulent transactions worth Rs 11,300 crore should act as a strong trigger for the government for reducing its stake to less than 50 per cent in the banks which should then be allowed to work on the lines of private sector lenders with a full sense of accountability to their shareholders protecting interest of depositors, Assocham has said.
"The PSU banks, ironically, are slipping from one crisis to the other and there is a limit the government can keep bailing them out at the cost of taxpayers' money, even if it is the principal shareholder in these lenders. The top banking positions are treated as extension of a government job and the senior most managements spend bulk of their quality time, receiving and implementing directions from the bureaucrats even for innocuous issues.
In the process, the core banking functions , including all important risk mitigation and management , take a back seat . The problem has become more grave with the banking adopting to new technologies which can prove both boon and bane , depending on how effectively they are implemented", said the Assocham in a statement.
Once the government equity in the banks is reduced below 50 per cent, there would be much more autonomy along with accountability and responsibility of the senior management. The boards should then be truly taking the policy decisions while the CEOs would run the banks with full authority, coupled with the commensurate responsibility, instead of looking towards the bureaucrats for directions.
The Chamber General Secretary Mr D S Rawat said, “there is an onus on India Inc as well. There are two sides of a coin. If one side represents the bank managements, the other side which involve the borrowers, mostly the large sized corporates, represents India Inc.
Any unsavoury incident, then leaves both sides of the coin smudged. It was time the industry also did some introspection. While we seek more autonomy for the banks, we from the industry must also set certain standards for us for ensuring a clean and best banking and business practices".
He called upon the Reserve Bank of India to take a lead and engage with the industry in finding ways to do a clean business in the entire financial sector, be it the public sector or private sector banks or even the non-banking finance companies.
The Assocham would be playing a pro-active role in reaching out to all the stakeholders in this regard and would be happy to work with the government and the regulators in disseminating the message that it pays to do business in the clean way.a
